Correlation Between Credit Agricole and Safe Orthopaedics
Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Safe Orthopaedics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Credit Agricole and Safe Orthopaedics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Agricole SA and Safe Orthopaedics SA, you can compare the effects of market volatilities on Credit Agricole and Safe Orthopaedics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Credit Agricole with a short position of Safe Orthopaedics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Safe Orthopaedics.
Diversification Opportunities for Credit Agricole and Safe Orthopaedics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Credit and Safe is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Safe Orthopaedics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Orthopaedics and Credit Agricole is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Credit Agricole SA are associated (or correlated) with Safe Orthopaedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Orthopaedics has no effect on the direction of Credit Agricole i.e., Credit Agricole and Safe Orthopaedics go up and down completely randomly.
Pair Corralation between Credit Agricole and Safe Orthopaedics
Assuming the 90 days trading horizon Credit Agricole SA is expected to generate 0.14 times more return on investment than Safe Orthopaedics. However, Credit Agricole SA is 7.35 times less risky than Safe Orthopaedics. It trades about -0.43 of its potential returns per unit of risk. Safe Orthopaedics SA is currently generating about -0.42 per unit of risk. If you would invest 1,426 in Credit Agricole SA on September 5, 2024 and sell it today you would lose (175.00) from holding Credit Agricole SA or give up 12.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Agricole SA vs. Safe Orthopaedics SA
Performance |
| Timeline |
| Credit Agricole SA |
| Safe Orthopaedics |
Credit Agricole and Safe Orthopaedics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Safe Orthopaedics
The main advantage of trading using opposite Credit Agricole and Safe Orthopaedics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Safe Orthopaedics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Safe Orthopaedics will offset losses from the drop in Safe Orthopaedics' long position.| Credit Agricole vs. Societe Generale SA | Credit Agricole vs. BNP Paribas SA | Credit Agricole vs. AXA SA | Credit Agricole vs. Orange SA |
| Safe Orthopaedics vs. Spineguard | Safe Orthopaedics vs. Neovacs SA | Safe Orthopaedics vs. Spineway | Safe Orthopaedics vs. Biophytis SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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